Battered telecoms equipment group Marconi offered little sign of an immediate end to its woes today after reporting a further sales slump.

The company, which completed a life-saving financial restructuring in May, said tough trading conditions and weaker demand had reduced sales in the three months to June 30 by about 15 per cent on the previous quarter, to £367 million.

Chief executive Mike Parton also ruled out a significant recovery in sales in the current quarter, although he reported positive longer-term signals.

The company said cost savings achieved from reducing staff numbers by 805 during the last quarter had been offset by the sales decline.

Marconi has already warned that it intends to cut headcount, which stands at 14,735, to 13,000 by the end of March 2004.

The company has regional bases in Coventry, Nottingham, Liverpool and Chelmsford, Essex.

First quarter sales fell from £430

million in the three months to March 31 and from £592 million a year earlier.

The reduction was seen in all operating regions, with sales to Europe and the Middle East down 17 per cent on the previous quarter at £220 million.

But Marconi said a number of its major European customers, including BT and Vodafone, had signalled their intention to increase expenditure, although this has not been translated into firm orders.

Mr Parton added: "Our markets remained very difficult during the quarter but there are positive signs that give us confidence for the longer term. For the first time in over two years, many large network operators are beginning to forecast increases in capital expenditure but it will take time for these plans to flow through into orders and sales."

For the three months to September 30, Mr Parton said he was expecting "flat to slightly increased" sales on the previous quarter.

The figure a year earlier had been £514 million.

Marconi agreed a deal with bondholders and banks in May to swap £4.7 billion of debt for equity in a new company.